According to Charlotte Garbutt, marketing analyst with the Home Grown Cereals Authority, the deterioration in value has been caused by good harvest prospects right across the northern hemisphere.
In contrast to 2012, where progress reports on poor weather across Europe helped push cereal prices higher, markets have reacted to better weather this year with forecasts of increased yields and prices going downward.
In the US, Garbutt said the risk of excess summer heat was passing and so forecasts for the maize crop had been uprated. It was a similar story in the Black Sea grain producing area, with wheat crops much better than a year ago.
Europe was now busy harvesting and Garbutt said the reports HGCA were collecting showed the yields were better than expected.
All of this has resulted in the futures price of wheat falling by around £20 per tonne in the past two months.
Yesterday statistics from the UK Department for the Environment, Food and Rural Affairs (Defra) confirmed that the English wheat acreage was at the lowest level in the past 30 years with only 1.5 million hectares, a drop of 19 per cent from 2012. In comparison, the English spring barley figure had rocketed, almost double the previous year’s acreage – bad news for Scotland’s specialist malting barley growers as the increased tonnage of barley will require to find a home.
Scottish spring barley producers have been moving into their crops in the past couple of days and early reports are of slightly better than expected yields, higher quality and low moisture content, the latter a financial bonus through savings on drying costs.
The higher quality and increased tonnage will bring their own problems, with Garbutt saying there was now downward pressure on the premium normally achieved for malting samples.
While maltsters have expressed their willingness to buy record tonnages of malting barley this year, it is still likely that some higher quality grain will go to either the feed market or for export.
Garbutt estimated that about 30 per cent of the winter sown oilseed rape crop had been harvested, with poor yields while again prices were fallin.